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Though I walk through the valley of the shadow of death I fear no evil / Ineptitude or Lies?



November 07, 2008 – Comments (6)

Though I walk through the valley of the shadow of death I fear no evil.

Unless you have been in a coma for the past year, this morning's announcement by the BS (er um the BLS) that the country lost 240,000 jobs in October and that the unemployment rate rose to 6.5% shouldn't be shocking (see report: THE EMPLOYMENT SITUATION:  OCTOBER 2008). 

To me, the real story here is the manipulation of the data by the BLS.  We all know that its employment numbers are bogus because the positive adjustments caused by its absurd birth / death model.  However, when a government organization understates job losses so significantly during the stretch run of an election where one party is losing seats in the Congress and Senate left and right and struggling to hold onto the White House one has to question if they are really that terrible at their job (in which case they should be fired) or if they were just lying to us in an attempt to influence the election (in which case they should be fired).  Either way it's bad.

Conveniently after all of the ballots have been counted, the BLS tells us today that the job losses last month totaled a whopping 284,000, making them the highest since just after the September 11th terrorist attacks.  Add to this the revised 127,000 job losses in August and the number of people who lost their jobs over the past two months was understated by an amazing 179,000.

I don't like being lied to and I don't like ineptitude, so either way this situation is annoying, but one has to try and look past this to see what the future will wventually bring.  I am confident that the unprecedented pumping of liquidity into the system and dramatic slashing of interest rates on a global scale combined with increased government spending on infrastructure in a number of countries will be enough to keep the economy from falling into a massive depression.  A bad recession, yes.  Another Great Depression, no.

Will stocks fall further?  Probably some, but the valuations of many companies are attractive enough at this point to justify continuing to average in little by little each month.  Investors who pick stocks wisely will likely do very well by purchasing stock in the right, dividend paying companies today and holding on to them for a number of years.  This too shall pass and when it does we will likely see inflation.  I leave you with a quote from a recent Ken Fisher column in Forbes that sums up my current feelings on investing right now perfectly:

"Though I walk through the valley of the shadow of death I fear no evil.  Seems that almost everyone else does, though.  Most investors need their investments to last them a long, long time, yet they're acting like the next few months are everything.  The shadow of death is an illusion.  In the long term equities always do well.  They will not too, even if they fall further first."


6 Comments – Post Your Own

#1) On November 07, 2008 at 10:08 AM, MarketBottom (28.65) wrote:

To me, the real story here is the manipulation of the data by the BLS.

Do corporations do the same thing?

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#2) On November 07, 2008 at 10:16 AM, LordZ wrote:

Cooking numbers,,, naa.... thats never happened...

DO not look to hope...

Expect Pain !!!!!!!!!!

I've seen this coming, seen you in a dream.

Hope is for FOOLS...

They give you just a little to completely break you down and take and more until they have it all.


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#3) On November 07, 2008 at 2:28 PM, abitare (30.03) wrote:

I wrote on this shill Ken Fisher before:

FIN 101: Spotting Gurus, Paid Liars, Fools and Cheerleaders(Part 3): Ken FisherJune 23, 2008

"Don't buy it. For months now the debate has been over whether America will have a hard landing or soft landing, the answer hinging on how big 2007's housing disaster turns out to be. Well, there won't be any housing disaster. We won't have a landing at all, soft or hard. Right now the U.S. and global economies are both accelerating.

You can see right through the housing crash story by looking at the prices of housing stocks. The market knows what the economic worrywarts do not, which is that the housing sector is already making a comeback. In the last six months housing stocks are up 24%, well ahead of the overall market. If housing were destined to fall apart in 2007 these stocks wouldn't be so strong now

Did you know that housing sales are up in the last few months, not down, and that inventories are lower than six months ago? We're accelerating, not landing. This is true not just in housing but also pretty much across the board."
- Kenneth L. Fisher
Forbes, 02.26.07

Recommendations: Buy Pulte, Toll, Beazer

Quote of the Day: Housing Boom!

Housing Boom!
Kenneth L. Fisher
Forbes, 02.26.07, 12:00 AM ET

"Data-mine all you want. You're not going to find a credible cause-and-effect relationship between oil and stocks.

Have you allowed yourself to be scared out of the stock market by high oil prices? If you have, you're making a big mistake. You are falling prey to a media myth. It's fascinating how often the media get away with a story claiming X causes Y when an abundance of statistical evidence exists to disprove the connection. It is routine now to see stories blaming a drop in stock prices on a rise in oil prices. Don't believe these stories. There's no connection between the two."

Stop Fretting About Oil
Kenneth L. Fisher, Portfolio Strategy
Forbes, 08.15.05, 12:00 AM ET

Stop Blaming Oil!
Barry L. Ritholtz
Monday, June 27, 2005

“Call me what you will. Debt is good.”

Learning To Love Debt

By Kenneth L. Fisher

May 1, 2007

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#4) On November 07, 2008 at 2:34 PM, abitare (30.03) wrote:

 A prudent man foreseeth the evil, and hideth himself; but the simple pass on, and are punished.

Proverbs 27:12 (KJV)

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#5) On November 07, 2008 at 7:06 PM, degaston (< 20) wrote:

Ken Fisher was right about inventories being lower in February 2007 -vs- August 2006. But his quote neglected to tell the obvious truth about housing inventories. They usually peak in August (especially when there is a leftover of houses on the market at the end of the peak volume Spring-Summer season before the new school year starts. And inventories tend to hit a trough around February right before the Spring-Summer sellers start listing their homes in March-April. Ken's omission makes him look stupid.

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#6) On November 07, 2008 at 9:11 PM, gman444 (28.21) wrote:

Nice example of the padded figures we are forced to rely on---also your take on the effects of the flood of liquidity and slashing of rates makes sense---the question is how much lower will things go before we wallow comfortably in the recession?

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